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Redistribution of Wealth

Back in December, 2009 when I first wrote this piece, the Tea Party element in this country was continually ranting against what they saw as the “socialist agenda” of Barack Obama. We now know nothing could be further from the truth. But the vitriol with which it was expressed at that time (and still to some degree) dictated that a defense of “redistributing the wealth” in this country point out that it was not a socialist idea, but one that came from the nation’s most prominent capitalist. I reprint it here because it still remains a valid and important issue.

By the time Andrew Carnegie died in August, 1919, he had given away $350,000,000.

“The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion. … Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. By taxing estates heavily at death the state marks its condemnation of the selfish millionaire’s unworthy life.” – Andrew Carnegie. Essay on Wealth, 1889

As Libertarian and ultra-conservative rancor vilify the so-called “socialist” acts of the Obama administration, it might behoove some to become familiar with one of the most wealthiest and active supporters of Capitalism. The fear spread by many on the right within some print and broadcast mediums have raised the alarm that Obama is tearing our country apart with such un-American notions as redistributing the wealth. Many are of the belief that such redistribution comes solely in the form of a person’s wealth being taken and given to those less willing to work for it or earn it. That such a question or concern should even be asked will always be fraught with pro-capitalist hyperbole toward what Andrew Carnegie regarded as the “the sacredness of property”.

Though the wealth of individuals may be envied by many it is also something people think should be aspired to alone and not considered for dissemination to the general public. Not only is the innate inclination to preserve what is ours very strong but it is connected with an equally greater need to acquire more. It is this notion I feel that has been exploited by Corporate and individual greed and sermonized by the profits of industry on the right.

A synopsis of how this sacrosanct view of personal property developed begins with the breaking away of European social structures where people were either born to the manor or to a servile position that propped up the manor. This was known as the era of feudalism and existed for approximately 600-700 years (9th to 15th century) until the advent of mercantilism began to change this arrangement.

Early 17th century mercantilists

Owning great wealth was no longer the sole domain of the royalty but had gained a foothold in a merchant class that had not been a part of the land-owning gentry in times past. Previous laborers who were tied to the land soon found sources of income in commodities and were able to build a capital base of their own that allowed them entry into a higher social and economic class. This upward mobility eventually pushed the envelope that lead to greater discoveries in the new world and a greater need for what would ultimately lead to a relatively prosperous middle class.

The dynamics of this transformation were slow but by the end of the 19th century the ability to acquire wealth was pretty much there for any individual if you pushed yourself physically and mentally and had just enough larceny in your veins to keep people from advancing beyond you. Rather than viewing such acts as wrong, some found that the act of pushing others out of what they had achieved was really just a part of the “natural” order of things. A scientific concept to justify this perception, “the survival of the fittest”, coined by Herbert Spencer back in 1864, was used by the captains of industry as the 20th century approached.

To Carnegie, wealthy individuals, especially those whose success was achieved in business, were obligated to redistribute that wealth beyond what they needed to live comfortably. He was not promoting communism or socialism. In fact he expressly felt that the “socialist or anarchist who seeks to overturn present conditions is to be regarded as attacking the foundation upon which civilization itself rests”. In his essay,Wealth, Carnegie referred to laws of accumulating wealth and the laws of competition as if they were akin to natural laws such as gravity. These views may have some merit under a more general law of self-interest that then spur personal efforts of man to formalize them through legislation; but the Spencerian notion of natural laws for accumulating wealth and competition would not hold up, I think, in a scientific court of inquiry.

But the point is that one of the wealthiest Capitalist that ever lived was espousing a sentiment that many today feel is un-American instead of a virtue. As was pointed out earlier, Carnegie WAS NOT supporting a notion that ALL income earning people, especially the middle class, should be taxed unreasonably so everyone below their economic status could live comfortably without working for it. He WAS advocating that the wealthiest 1 or 2 percent of those in this nation should utilize their great fortunes to advance the lives of those who now find themselves without jobs, without the means for a higher education and without adequate health care coverage to sustain a productive life.

Carnegie would probably not only be astonished at the greed that led to the economic deprivations of many Americans today but would be outraged at the notion by those who advocate a return to those days that preceded such universal economic failure. He would be further offended by right-wing talking heads that admonish an administration that is trying to do what he pushed for over a century ago; using the great wealth of individuals as a “potent force” for elevating the weakest amongst us at the hour of their greatest need and beyond.

For Carnegie, TRUE individualism would accomplish more than what socialism and communism promised.

“Under [individualism’s] sway we shall have an ideal state in which the surplus wealth of the few will become, in the best sense, the property of the many, because administered for the common good; and this wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if it had been distributed in small sums to the people themselves. Even the poorest can be made to see this and to agree that great sums gathered by some of their fellow citizens and spent for public purposes, from which the masses reap the principal benefit, are more valuable to them than if scattered among them through the course of many years in trifling amounts.”

9 responses to “Redistribution of Wealth”

I think that the wealthy think that if they hold onto every dollar, they will lose their prestige. I truly think it’s the lifestyle they do not want to share or give up. Often, they are treated like gold and if too many people had wealth, they would lose that “special” image. They fear the end of their lifestyle if more people had wealth.

There does become a point when wealth is nothing more than having more than you can use and where it is the humanity of some to dispense with it in ways that helps less fortunate people it is the greed of others that demonizes such practices, IMO.

I wish someone would explain to me once and for all why socialism has bizarrely become a dirty word in the United States. I don’t understand it. What is wrong with socialism? As a conservative, I yammered on and flung the word quite liberally as an insult, but I never quite understood why it was an insult; I just knew it was.

I suspect Terrance that the capitalists in this country have hammered the notion into so many that socialism is an evil equivalent to brutal and totalitarian regimes, especially Communist Russia. Socialism does threaten some of the “free market” principles of capitalism but it is quite capable of living side by side with it in limited form to make sure the excesses in both do not cripple the economy or put undue burdens on a strong middle class.

The ideologically pure honestly believe that all government regulation impacts total freedom that many assume will work out best for most everyone. Its an ideal however as we’ve recently seen, not the reality. But people have emotional hot points about this that they are simply unwilling to let go of. A few like yourself Terrance are the exception to that rather than the norm.

I thoroughly enjoyed this post, lb. You stated the points clearly and succinctly. I didn’t know about that particular aspect of Carnegie and his exhortation to the wealthy to be socially conscious people – not Socialists. The Republicans and TP politicians have used the politics of fear and paranoia so well in the last 4 years and we Dems let them get away with it – Obama has let them get away with it – by not clearly spelling out the cruel fallacies in their arguments. Of course, most politicians these days act like any discussion of “poverty” or the “poor” is off topic. And with the Republican party almost completely in the pockets of big corporations, what other narrative is possible for them but one that says the wealthy have to stay very wealthy because they are the “job creators” and will take care of the vast numbers of unemployed by deigning to give them low wage jobs. We need real change this time in 2012. Obama and us Dems better get in the game, too.